INSUBCONTINENT EXCLUSIVE:
Foreign brokerage CLSA has cautioned investors to brace for volatility in market going ahead and has set a December-end target of 11000 for
Nifty, which means a potential upside of 2 .5 per cent.
The Nifty ended up 55.10 points, or 0.5 per cent, at 10727.35 on
Friday.
Above-average valuations and political uncertainty make a rerating unlikely in 2019, brokerage said
Even as there is a high possibility of double-digit earnings growth, much of it is priced in, said CLSA
Moreover, fiscal pressures are likely to sustain in financial year 2019-20 as well, it said.
The brokerage prefers stocks which are strong
structural stories and those companies which have a compelling valuation support
Its top picks include HDFC, IndusInd Bank, ICICI Bank, Reliance Industries, ITC, Mahindra Mahindra, Infosys, Godrej Properties, NTPC, and
The Nifty declined 6 per cent in US dollar terms, but has outperformed EM and Asia ex-Japan benchmark by 11 percentage points
It currently trades at 16.8 times one-year forward earnings, 10 per cent premium to its 10-year average.
POLITICAL UNCERTAINTYCLSA said
Indian market is likely to remain volatile in coming months due to political uncertainties ahead of general elections.
The Bharatiya Janata
companies, downward pressure on domestic flows is possible and foreign flows are likely to remain tepid, according to CLSA.
Domestic flows
gathered pace after Narendra Modi came to power in 2014
have been a critical support for markets given that FIIs have seen outflows of $4 billion during this period
